BUSINESS ENVIRONMENT

Business Environment



Business Environment

Introduction

Tesco is a public limited company based international president of the United Kingdom working in the commissary and major retail store chains. It is the largest British shops in terms of global sales and market share with total earnings exceed £ 3 billion. She is currently in third place worldwide in terms of revenue after Wal-Mart and Carrefour but second in terms of profits ahead of Carrefour. And after that has been specializing in foods and beverages, it has diversified its business to include new activities such as selling clothes, electronics, household, financial services, telecommunications, insurance houses, health insurance, vehicle insurance, insurance dental, selling and renting DVD and CDs, download music, Internet service provider and the sale of computer software. escort operates in Europe with 825 stores spread across six countries (117 in Ireland, 313 in Poland, 164 in Hungary, 74 in Slovakia, 127 in the Czech Republic and 30 in Turkey) and Asia with 1,136 stores (137 in Japan, 614 in Thailand, 280 in South Korea, 30 in Malaysia, four in Taiwan and 71 in mainland China). Tesco was also present in France through a store in Calais and specialize in the sale of alcohol to the British. This was due to lower taxes on alcohol in France than in Britain. The turnover in 2006 was 2 million pounds. Despite this, store was closed August 30, 2010 (Data monitor, 2010).

Current Performance of the retail industry

This industry retails specialized lines of goods, with operators offering a wide and differing range of products. Hence, broad changes in consumer sentiment and spending patterns, rather than product-specific trends, drive the performance of the Small Specialty Retail Stores industry. Since the recession, consumers have curtailed discretionary spending, driving down sales of most industry products. In addition, increasing competition from mass merchandisers, warehouse clubs, discount department stores and online retailers further eroded industry sales. Consequently, revenue is expected to decline at an average annual rate of 4.3% over the five years to 2011, to total $24.3 billion. Despite such poor industry-wide performance, sales of tobacco have remained resilient throughout the years due to tobacco's function as a stress reliever, mitigating some of the industry's losses. Over the past five years, declining household wealth, rising unemployment rates and uncertain economic conditions lowered the disposable income level of most US households (Euro monitor, 2010). Following the collapse of the housing market, consumer confidence crashed significantly (as much as 25.5% in 2008), while unemployment rates soared to nearly 10.0% in 2009. These factors caused disposable income to fall in 2009, marking its first decline in more almost two decades. For this reason, US consumers were forced to reevaluate their expenditures and cut back on nonessential goods, including many products that are retailed in this industry.

This decline in demand caused industry revenue to fall 9.7% and 7.5% in 2008 and 2009, respectively. In 2010, the US economy gradually began its recovery with consumer confidence and per capita disposable both rising ...